Volkswagen to launch $13.000 small car in USA

Volkswagen has announced they will launched a new range of small cars with turbocharged 1.4-liter engines and prices that start around $13,000.

"Small cars like the Polo could be very, very interesting," said Stefan Jacoby, CEO of Volkswagen Group of America. He’s also looking at a production version of the rear-drive space up! concept that debuted at the Los Angeles auto show in November.

Other possible models "are attractive lifestyle cars that are a little bit SUV-looking and a little van," he said. Jacoby said VW research indicates growing demand in the United States for small, fuel-efficient cars.

"I think it is very attractive for VW to go into that segment," he said last week at the Chicago Auto Show. No timetable was given.

"I think an entry could be $13,000, $14,000," Jacoby said. Besides the Polo, "I am counting on lifestyle" vehicles, he said. "Look at Mini, what they are doing in terms of pricing. Smart also is not a cheap buy. If you really equip them properly, you are not at $13,000.

"We are not a cheap make in this market," Jacoby said, adding that the vehicles will have "value and some emotion," so they "will not start at $9,000 or $10,000." VW’s least expensive U.S. model is the Rabbit, which starts at $16,130 including shipping. Its inline five-cylinder engine gets 30 mpg on the highway and 22 mpg in the city.

Also he said that when the CAFE law will come to life in 2011, small cars with industry trend. This is why the decision to bring downsized turbocharged engines with 1.4-liter displacement.